IFX Market Report for 30/07/2012

GBPUSD hit a high of 1.5768 during Friday’s session, with risk appetite returning to the market. The currency pair continue to trade above 1.57 this morning but have fallen from the highs echoing the EURUSD trading pattern this morning. Cable looks set to test resistance at 1.5800, a failure to break this level could spark a decline back to support at 1.5585.GBPEUR had a volatile trading day Friday, as the UK afternoon trading session started to draw to a close we saw the pair fall to post a low of 1.2698 however this morning the pair are currently trading around 1.2780 price having posted a high of 1.2795 already.

Markets will be paying attention to economic data releases from the UK this week ahead of the Bank of England Interest rate meeting being held this Thursday, for decisions on further quantitative easing and interest rates.

Hometrack Ltd said UK house prices fell in July for the first time this year and may extend their decline as a deepening recession curbs demand for homes.

With no high impact data being released today from the UK and States and only one piece at 8am from the Eurozone, markets will be trading on risk sentiment.
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WORLDWIDE

ECB President Mario Draghi, who sparked a global market rally last week by pledging to do whatever it takes to preserve the euro, is trying to build consensus among governments and central bankers for a plan to ease borrowing costs in Spain and Italy before ECB policy makers convene on Thursday. He meets with US Treasury Secretary Timothy Geithner in Frankfurt today and is also attempting to win over Bundesbank President Jens Weidmann, a critic of ECB bond purchases. Berlin, Paris and Rome have already endorsed Draghi’s approach, echoing in his language that they too will do what is needed to protect the euro.

EURUSD hit highs of 1.2388 Friday against lows of 1.2242, showing how volatile the currency pair is trading recently. Currently the pair is trading around 1.2270, having fallen from the high of 1.2306 set earlier this morning. Any upside momentum requires a break above 1.2348 resistance.

Representatives of the European Commission, the ECB and the IMF; the so-called Troika, will remain in Greece for as long as needed in order to determine the €11.6bn worth of consolidation measures needed over the next three years. The Troika had originally planned to leave Athens at the end of July.

Spanish GDP was released this morning to post a figure of -0.4% against a forecast -0.4% figure from last month’s -0.3%.

US GDP figures Friday fell in-line with expectations, posting a figure of 1.5% adding the volatile trading experienced last week.
German Consumer Prices rose as expected data showed on Friday posting the 0.4% gain month-on-month. This leaves the annual rate at 1.4% which was also as expected.

Friday’s reading of July’s final University of Michigan Consumer Sentiment figure posted a reading of 72.3 vs the 72.0 forecasted and previous month June’s reading of 73.2.